Did 2013 Tax Hikes Slow Charitable Giving in 2012?

Last year, many of the wealthy said they would give less to charity if taxes went up.

Turns out, they weren't kidding.

According to data from Blackbaud, which tracks monthly numbers for more than 3,100 non-profits, total giving in the United States grew by a scant two percent in 2012 compared with 2011. That growth rate is less than half that of 2011, and marks the slowest growth since the depths of the financial crisis in 2009.

While Blackbaud doesn't calculate total dollar giving, its results have closely tracked giving totals from GivingUSA. Based on those numbers, Blackbaud expects charitable giving to amount to $304 billion in 2012.

"Last year continued to show signs of a slow recovery for overall fundraising," said Steve MacLaughlin, co-author of the report and director of Blackbaud's Idea Lab.

MacLaughlin said tax policy may have played a role, as wealthy donors prepared for higher tax rates in 2013. But he said natural disasters and more cautious overall giving were largely to blame for the lackluster year in charity.

Charitable Giving by Year

Year

Total Giving (in Billions)

2012

$304.40 (proj)

2011

$298.42

2010

$290.89

2009

$280.30

2008

$299.81

2007

$310.57

2006

$296.21

MacLaughlin said 2010 and 2011 included the earthquakes in Haiti and Japan, which boosted giving to international causes. This year, he said, there were no major disasters overseas, which dampened overall giving. He said that without Superstorm Sandy – which boosted giving moderately at the end of 2012 – giving in 2012 would probably have been flat.

Two bright spots in charitable giving are online giving and smaller non-profits. MacLaughlin said non-profits with under $1 million in contributions grew by more than seven percent in 2012. Larger non-profits, with more than $10 million in contributions, saw their donations increase by only 0.3 percent.

MacLaughlin said the smaller charities are benefiting from a move toward more local giving.